Change of Use of Proceeds

11.2.1 A listed company that intends to change the use of proceeds raised shall make timely disclosure upon the adoption of a relevant resolution by its board of directors and submit the matter to the shareholders’ meeting for consideration.

11.2.2 A listed company that discloses its change of the purpose of proceeds shall submit the following documents to the Exchange:

(1) draft announcement;

(2) the resolution of the board of directors and the draft announcement of the resolution;

(3) independent directors’ opinion on the proposed change of the purpose of proceeds;

(4) opinion of the board of supervisors on the proposed change of the purpose of proceeds;

(5) opinion of the sponsor on the proposed change of the purpose of proceeds (if applicable);

(6) explanation on the proposed change of the purpose of proceeds; (7) letter of intent or agreement on the proposed new project;

(8) official approval document of the competent authority on the proposed new project;

(9) feasibility report on the proposed new project; (10)report by relevant securities service agencies;

(11)the agreement under which the former project is terminated; and (12)other documents as required by the Exchange.

The listed company shall, in accordance with the specific situation of the new project, submit to the Exchange all or part of the documents enumerated in (7) to (11) of the preceding paragraph.

proceeds shall contain the following information:

(1) general information on the former project and the specific reasons for making such a change;

(2) general information on the proposed new project, market prospects and risk disclosure;

(3) statement that the proposed new project has been approved or is pending approval by the relevant competent authority (if applicable);

(4) statement that the proposed new project is pending approval by the shareholders’ general meeting; and

(5) other information as required by the Exchange.

Where the new project involves asset acquisitions or external investment, the company shall also make disclosure by applying mutatis mutandis the relevant provisions in these Rules.

Section 3 Earnings Preannouncement, Preliminary Results and Earnings Estimates

11.3.1 A listed company that forecasts the occurrence of any of the following in its annual results shall release an earnings preannouncement within one month from the end of the financial year. A listed company that forecasts the occurrence of any of the following in its interim and third-quarter results may also release an earnings preannouncement:

(1) the net profit would be negative;

(2) the net profit would rise or fall by more than 50 percent over the same period a year earlier; or

(3) turning to profit.

11.3.2 Where a listed company forecasts the occurrence of the circumstance

prescribed in (2) of Section 11.3.1 hereof but the base figure in comparison in terms of the earnings per share is relatively small, the company may be exempt from releasing the earnings preannouncement with the approval of the Exchange:

(1) the absolute value of its earnings per share as shown in its previous annual report is below or equivalent to RMB 0.05;

(2) the absolute value of its earnings per share as shown in its previous interim report is below or equivalent to RMB 0.03;

(3) the absolute value of its earnings per share for the period from the beginning of the previous year to the end of the third quarter is below or equivalent to RMB 0.04.

11.3.3 Where a listed company expects a significant difference between its results for the current period and its previously disclosed earnings preannouncement, it shall release a restatement of earnings preannouncement in a timely manner. Such restatement shall contain the following information:

(1) its expected earnings for the current period;

(2) the difference between its expected earnings for the current period and its previously disclosed earnings preannouncement and the reason therefor;

(3) its board of directors’ apology and the identification of the persons liable therefor; and

(4) statement on possible special treatment or lifting of special treatment, suspension of listing, restoration of listing or termination of listing of its stocks (if applicable).

If the restatement of earnings preannouncement is based on the audit result of a certified public accountant, the company shall also state whether and where it disagrees with the certified public accountant.

11.3.4 A listed company that releases an earnings preannouncement or a restatement of the earnings preannouncement shall submit the following documents to the Exchange:

(1) draft earnings preannouncement or restatement; (2) relevant explanation of the board of directors;

(3) the certified public accountant’s opinion on whether the basis and process for the company to make such earnings preannouncement or restatement are proper and prudential (if applicable); and

(4) other documents as required by the Exchange.

11.3.5 A listed company may release preliminary results prior to the disclosure of its annual and interim reports, which include such key financial data and indicators as the revenue, operating profit, total profit, net profit, total assets, net assets, earnings per share, net assets per share and return on equity for the current period as well as the comparative figures for the corresponding period of the previous year.

A listed company that releases preliminary results shall submit the following documents to the Exchange:

(1) draft announcement;

officer (if any), and the principal officer of the accounting agency (accounting head ); and

(3) other documents as required by the Exchange.

11.3.6 A listed company shall guarantee that there is no material discrepancy between the financial data and indicators in the preliminary results and the actual figures in the corresponding periodic report.

If, prior to disclosure of the periodic report, the company discovers that the difference between the previously disclosed financial data and indicators and the actual figures will be up to 10 percent, it shall, in a timely manner, release a restatement of its preliminary results, stating the specific difference and the reason therefor. When the difference reaches 20 percent, it shall, at the time as it discloses its periodic report, make an apology in the form of board announcement and state therein its determination of the persons liable therefor.

11.3.7 Where a listed company expects a material difference between its results for the current period and the previously disclosed earnings estimate, it shall, in a timely manner, release a restatement of the earnings estimate and submit the following documents to the Exchange:

(1) draft restatement;

(2) explanation of the board of directors;

(3) statement of the board of directors on whether the basis and process for making the restatement are proper and prudential;

(4) special statement of the CPA on the material difference between the earnings estimate and the actual figure; and

(5) other documents as required by the Exchange.

11.3.8 A listed company’s restatement of its earnings estimate shall contain the following information:

(1) expected results for the current period;

(2) the difference between its expected results for the current period and its previously disclosed earnings estimate and the reason therefor;

(3) its board of directors’ apology and the identification of the persons liable therefor; and

(4) statement on possible special treatment or lifting of special treatment, suspension of listing, restoration of listing or termination of listing of its stocks (if applicable).